AuditingExam3-Basics

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Author:
tsiemg
ID:
68946
Filename:
AuditingExam3-Basics
Updated:
2011-03-01 16:27:16
Tags:
Auditing
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Description:
Auditing Exam 3 Study Guide - Basics
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  1. (4) Phases of a Financial Statement Audit
    • 1 Plan & Design an Audit Approach
    • 2 Perform Tests of Controls & Substantive Tests of Transactions
    • 3 Perform Analytical Procedures & Tests of Details of Balances
    • 4 Complete the Audit & Issue an Audit Report
  2. (5) Financial Statement Cycles
    • 1 Sales & Collections
    • 2 Acquisition & Payment
    • 3 Payroll & Personnel
    • 4 Inventory & Warehousing
    • 5 Capital Acquisition & Repayment
  3. (8) Types of Audit Evidence (PCDAIRRO)
    • 1 Physical Examination
    • 2 Confirmation
    • 3 Documentation
    • 4 Analytical Procedures
    • 5 Inquiries of the Client
    • 6 Recalculation
    • 7 Reperformance
    • 8 Observation
  4. (4) items in Initial Audit Planning
    • 1 Auditor decides whether to accept a new client or continue with existing one
    • 2 Auditor identifies why the client wants or needs an audit
    • 3 Auditor obtains an understanding with the client about the terms of the engagement
    • 4 Auditor develops an overall strategy for the audit including engagement, staffing, & required audit specialists
  5. Engagement Letter
    An agreement between the CPA firm & client as to the terms of the engagement for the conduct of the audit & related services
  6. What is included in an engagement letter (8) items (ORLRDASF)
    • 1 Objectives
    • 2 Responsibility of auditor & mgt
    • 3 Engagement Limitations
    • 4 Restrictions imposed on auditors
    • 5 Deadline for completition
    • 6 Clients assistance in obtaining docs & records
    • 7 Schedules to be prepared for the auditor
    • 8 Agreement on Fees
  7. (3) Times during an examination when analytical procedures may be performed
    • 1 Required in planning phase to assist in determining nature, extent & timing
    • 2 During the testing phase as a substantitive test in support of account balances
    • 3 Required during the completion phase of the audit as a final review for material misstatements

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